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Amend Tax Return 2011

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Amend Tax Return 2011

Amend tax return 2011 1. Amend tax return 2011   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. Amend tax return 2011 When repayment contributions can be made. Amend tax return 2011 No deduction. Amend tax return 2011 Reserve component. Amend tax return 2011 Figuring your IRA deduction. Amend tax return 2011 Reporting the repayment. Amend tax return 2011 Example. Amend tax return 2011 General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. Amend tax return 2011 Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. Amend tax return 2011 Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. Amend tax return 2011 Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. Amend tax return 2011 2013 Reporting. Amend tax return 2011 Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. Amend tax return 2011 One-time transfer. Amend tax return 2011 Testing period rules apply. Amend tax return 2011 More information. Amend tax return 2011 Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. Amend tax return 2011  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. Amend tax return 2011 If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. Amend tax return 2011 For more information, see How Much Can Be Contributed? in this chapter. Amend tax return 2011 Modified AGI limit for traditional IRA contributions increased. Amend tax return 2011  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Amend tax return 2011 If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. Amend tax return 2011 If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Amend tax return 2011 See How Much Can You Deduct? in this chapter. Amend tax return 2011 Net Investment Income Tax. Amend tax return 2011  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). Amend tax return 2011 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Amend tax return 2011 Distributions from a nonqualified retirement plan are included in net investment income. Amend tax return 2011 See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Amend tax return 2011 What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Amend tax return 2011  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Amend tax return 2011 If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Amend tax return 2011 If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Amend tax return 2011 Introduction This chapter discusses the original IRA. Amend tax return 2011 In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Amend tax return 2011 ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Amend tax return 2011 The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. Amend tax return 2011 Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Amend tax return 2011 Who Can Open a Traditional IRA? You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year, and You were not age 70½ by the end of the year. Amend tax return 2011 You can have a traditional IRA whether or not you are covered by any other retirement plan. Amend tax return 2011 However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. Amend tax return 2011 See How Much Can You Deduct , later. Amend tax return 2011 Both spouses have compensation. Amend tax return 2011   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. Amend tax return 2011 You cannot both participate in the same IRA. Amend tax return 2011 If you file a joint return, only one of you needs to have compensation. Amend tax return 2011 What Is Compensation? Generally, compensation is what you earn from working. Amend tax return 2011 For a summary of what compensation does and does not include, see Table 1-1. Amend tax return 2011 Compensation includes all of the items discussed next (even if you have more than one type). Amend tax return 2011 Wages, salaries, etc. Amend tax return 2011   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. Amend tax return 2011 The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans). Amend tax return 2011 Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. Amend tax return 2011 Commissions. Amend tax return 2011   An amount you receive that is a percentage of profits or sales price is compensation. Amend tax return 2011 Self-employment income. Amend tax return 2011   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes. Amend tax return 2011   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Amend tax return 2011 Self-employment loss. Amend tax return 2011   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. Amend tax return 2011 Alimony and separate maintenance. Amend tax return 2011   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. Amend tax return 2011 Nontaxable combat pay. Amend tax return 2011   If you were a member of the U. Amend tax return 2011 S. Amend tax return 2011 Armed Forces, compensation includes any nontaxable combat pay you received. Amend tax return 2011 This amount should be reported in box 12 of your 2013 Form W-2 with code Q. Amend tax return 2011 Table 1-1. Amend tax return 2011 Compensation for Purposes of an IRA Includes . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 Does not include . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011   earnings and profits from property. Amend tax return 2011 wages, salaries, etc. Amend tax return 2011     interest and dividend income. Amend tax return 2011 commissions. Amend tax return 2011     pension or annuity income. Amend tax return 2011 self-employment income. Amend tax return 2011     deferred compensation. Amend tax return 2011 alimony and separate maintenance. Amend tax return 2011     income from certain  partnerships. Amend tax return 2011 nontaxable combat pay. Amend tax return 2011     any amounts you exclude from income. Amend tax return 2011     What Is Not Compensation? Compensation does not include any of the following items. Amend tax return 2011 Earnings and profits from property, such as rental income, interest income, and dividend income. Amend tax return 2011 Pension or annuity income. Amend tax return 2011 Deferred compensation received (compensation payments postponed from a past year). Amend tax return 2011 Income from a partnership for which you do not provide services that are a material income-producing factor. Amend tax return 2011 Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Amend tax return 2011 Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Amend tax return 2011 When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Amend tax return 2011 However, the time for making contributions for any year is limited. Amend tax return 2011 See When Can Contributions Be Made , later. Amend tax return 2011 How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. Amend tax return 2011 You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Amend tax return 2011 You can also open an IRA through your stockbroker. Amend tax return 2011 Any IRA must meet Internal Revenue Code requirements. Amend tax return 2011 The requirements for the various arrangements are discussed below. Amend tax return 2011 Kinds of traditional IRAs. Amend tax return 2011   Your traditional IRA can be an individual retirement account or annuity. Amend tax return 2011 It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Amend tax return 2011 Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. Amend tax return 2011 The account is created by a written document. Amend tax return 2011 The document must show that the account meets all of the following requirements. Amend tax return 2011 The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. Amend tax return 2011 The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. Amend tax return 2011 However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. Amend tax return 2011 Contributions, except for rollover contributions, must be in cash. Amend tax return 2011 See Rollovers , later. Amend tax return 2011 You must have a nonforfeitable right to the amount at all times. Amend tax return 2011 Money in your account cannot be used to buy a life insurance policy. Amend tax return 2011 Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. Amend tax return 2011 You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. Amend tax return 2011 See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Amend tax return 2011 Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. Amend tax return 2011 An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. Amend tax return 2011 An individual retirement annuity must meet all the following requirements. Amend tax return 2011 Your entire interest in the contract must be nonforfeitable. Amend tax return 2011 The contract must provide that you cannot transfer any portion of it to any person other than the issuer. Amend tax return 2011 There must be flexible premiums so that if your compensation changes, your payment can also change. Amend tax return 2011 This provision applies to contracts issued after November 6, 1978. Amend tax return 2011 The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. Amend tax return 2011 Distributions must begin by April 1 of the year following the year in which you reach age 70½. Amend tax return 2011 See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Amend tax return 2011 Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. Amend tax return 2011 The bonds have the following features. Amend tax return 2011 They stop earning interest when you reach age 70½. Amend tax return 2011 If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. Amend tax return 2011 You cannot transfer the bonds. Amend tax return 2011 If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. Amend tax return 2011 See Age 59½ Rule under Early Distributions, later. Amend tax return 2011 You can roll over redemption proceeds into IRAs. Amend tax return 2011 Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. Amend tax return 2011 Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. Amend tax return 2011 See Publication 560 for more information about SEPs. Amend tax return 2011 Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. Amend tax return 2011 The requirements for individual retirement accounts apply to these traditional IRAs. Amend tax return 2011 Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. Amend tax return 2011 However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. Amend tax return 2011 The disclosure statement must explain certain items in plain language. Amend tax return 2011 For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. Amend tax return 2011 This explanation must appear at the beginning of the disclosure statement. Amend tax return 2011 If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. Amend tax return 2011 The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. Amend tax return 2011 These requirements apply to all sponsors. Amend tax return 2011 How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Amend tax return 2011 These limits and rules are explained below. Amend tax return 2011 Community property laws. Amend tax return 2011   Except as discussed later under Kay Bailey Hutchison Spousal IRA Limit , each spouse figures his or her limit separately, using his or her own compensation. Amend tax return 2011 This is the rule even in states with community property laws. Amend tax return 2011 Brokers' commissions. Amend tax return 2011   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Amend tax return 2011 For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. Amend tax return 2011 Trustees' fees. Amend tax return 2011   Trustees' administrative fees are not subject to the contribution limit. Amend tax return 2011 For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. Amend tax return 2011 Qualified reservist repayments. Amend tax return 2011   If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined later under Early Distributions) you received. Amend tax return 2011 You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. Amend tax return 2011 To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. Amend tax return 2011 Limit. Amend tax return 2011   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. Amend tax return 2011 When repayment contributions can be made. Amend tax return 2011   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. Amend tax return 2011 No deduction. Amend tax return 2011   You cannot deduct qualified reservist repayments. Amend tax return 2011 Reserve component. Amend tax return 2011   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. Amend tax return 2011 Figuring your IRA deduction. Amend tax return 2011   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Amend tax return 2011 Reporting the repayment. Amend tax return 2011   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Amend tax return 2011 Example. Amend tax return 2011   In 2013, your IRA contribution limit is $5,500. Amend tax return 2011 However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. Amend tax return 2011 You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). Amend tax return 2011 In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. Amend tax return 2011   For 2013, you can contribute a total of $8,500 to your IRA. Amend tax return 2011 This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. Amend tax return 2011 You contribute the maximum allowable for the year. Amend tax return 2011 Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. Amend tax return 2011 The qualified reservist repayment is not deductible. Amend tax return 2011 Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Amend tax return 2011 See chapter 2 for information about Roth IRAs. Amend tax return 2011 General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. Amend tax return 2011 Note. Amend tax return 2011 This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Amend tax return 2011 This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. Amend tax return 2011 (See Nondeductible Contributions , later. Amend tax return 2011 ) Qualified reservist repayments do not affect this limit. Amend tax return 2011 Examples. Amend tax return 2011 George, who is 34 years old and single, earns $24,000 in 2013. Amend tax return 2011 His IRA contributions for 2013 are limited to $5,500. Amend tax return 2011 Danny, an unmarried college student working part time, earns $3,500 in 2013. Amend tax return 2011 His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Amend tax return 2011 More than one IRA. Amend tax return 2011   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. Amend tax return 2011 Annuity or endowment contracts. Amend tax return 2011   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. Amend tax return 2011 If more than this amount is contributed, the annuity or endowment contract is disqualified. Amend tax return 2011 Kay Bailey Hutchison Spousal IRA Limit For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Amend tax return 2011 Your spouse's IRA contribution for the year to a traditional IRA. Amend tax return 2011 Any contributions for the year to a Roth IRA on behalf of your spouse. Amend tax return 2011 This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older). Amend tax return 2011 Note. Amend tax return 2011 This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Amend tax return 2011 Example. Amend tax return 2011 Kristin, a full-time student with no taxable compensation, marries Carl during the year. Amend tax return 2011 Neither of them was age 50 by the end of 2013. Amend tax return 2011 For the year, Carl has taxable compensation of $30,000. Amend tax return 2011 He plans to contribute (and deduct) $5,500 to a traditional IRA. Amend tax return 2011 If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. Amend tax return 2011 This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. Amend tax return 2011 In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). Amend tax return 2011 Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. Amend tax return 2011 However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. Amend tax return 2011 See How Much Can You Deduct , later. Amend tax return 2011 Example. Amend tax return 2011 Tom and Darcy are married and both are 53. Amend tax return 2011 They both work and each has a traditional IRA. Amend tax return 2011 Tom earned $3,800 and Darcy earned $48,000 in 2013. Amend tax return 2011 Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. Amend tax return 2011 They can contribute up to $6,500 to Darcy's IRA. Amend tax return 2011 If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. Amend tax return 2011 Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. Amend tax return 2011 Example. Amend tax return 2011 Rafael, who is 40, earns $30,000 in 2013. Amend tax return 2011 Although he can contribute up to $5,500 for 2013, he contributes only $3,000. Amend tax return 2011 After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). Amend tax return 2011 He cannot contribute $2,500 more than the limit for any later year. Amend tax return 2011 More Than Maximum Contributions If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. Amend tax return 2011 However, a penalty or additional tax may apply. Amend tax return 2011 See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. Amend tax return 2011 When Can Contributions Be Made? As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). Amend tax return 2011 Contributions must be in the form of money (cash, check, or money order). Amend tax return 2011 Property cannot be contributed. Amend tax return 2011 Although property cannot be contributed, your IRA may invest in certain property. Amend tax return 2011 For example, your IRA may purchase shares of stock. Amend tax return 2011 For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. Amend tax return 2011 You may be able to transfer or roll over certain property from one retirement plan to another. Amend tax return 2011 See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . Amend tax return 2011 You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. Amend tax return 2011 For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). Amend tax return 2011 Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. Amend tax return 2011 For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. Amend tax return 2011 See Who Can Open a Traditional IRA , earlier. Amend tax return 2011 Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Amend tax return 2011 Contributions can resume for any years that you qualify. Amend tax return 2011 Contributions must be made by due date. Amend tax return 2011   Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. Amend tax return 2011 For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. Amend tax return 2011 Age 70½ rule. Amend tax return 2011   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Amend tax return 2011   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Amend tax return 2011 If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Amend tax return 2011 Designating year for which contribution is made. Amend tax return 2011   If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribution is for. Amend tax return 2011 If you do not tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). Amend tax return 2011 Filing before a contribution is made. Amend tax return 2011    You can file your return claiming a traditional IRA contribution before the contribution is actually made. Amend tax return 2011 Generally, the contribution must be made by the due date of your return, not including extensions. Amend tax return 2011 Contributions not required. Amend tax return 2011   You do not have to contribute to your traditional IRA for every tax year, even if you can. Amend tax return 2011 How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed . Amend tax return 2011 However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Amend tax return 2011 See Limit if Covered by Employer Plan , later. Amend tax return 2011 You may be able to claim a credit for contributions to your traditional IRA. Amend tax return 2011 For more information, see chapter 4. Amend tax return 2011 Trustees' fees. Amend tax return 2011   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Amend tax return 2011 However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Amend tax return 2011 For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. Amend tax return 2011 Brokers' commissions. Amend tax return 2011   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Amend tax return 2011 Full deduction. Amend tax return 2011   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. Amend tax return 2011   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Amend tax return 2011 Kay Bailey Hutchison Spousal IRA. Amend tax return 2011   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Amend tax return 2011 The IRA deduction for the year of the spouse with the greater compensation. Amend tax return 2011 Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Amend tax return 2011 Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Amend tax return 2011   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. Amend tax return 2011 Note. Amend tax return 2011 If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. Amend tax return 2011 After a divorce or legal separation, you can deduct only the contributions to your own IRA. Amend tax return 2011 Your deductions are subject to the rules for single individuals. Amend tax return 2011 Covered by an employer retirement plan. Amend tax return 2011   If you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be further limited. Amend tax return 2011 This is discussed later under Limit if Covered by Employer Plan . Amend tax return 2011 Limits on the amount you can deduct do not affect the amount that can be contributed. Amend tax return 2011 Are You Covered by an Employer Plan? The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. Amend tax return 2011 The “Retirement Plan” box should be checked if you were covered. Amend tax return 2011 Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. Amend tax return 2011 If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Amend tax return 2011 Federal judges. Amend tax return 2011   For purposes of the IRA deduction, federal judges are covered by an employer plan. Amend tax return 2011 For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. Amend tax return 2011 These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Amend tax return 2011 Tax year. Amend tax return 2011   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Amend tax return 2011 For almost all people, the tax year is the calendar year. Amend tax return 2011 Defined contribution plan. Amend tax return 2011   Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. Amend tax return 2011 However, also see Situations in Which You Are Not Covered , later. Amend tax return 2011   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Amend tax return 2011 In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. Amend tax return 2011 The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. Amend tax return 2011 Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Amend tax return 2011 Example. Amend tax return 2011 Company A has a money purchase pension plan. Amend tax return 2011 Its plan year is from July 1 to June 30. Amend tax return 2011 The plan provides that contributions must be allocated as of June 30. Amend tax return 2011 Bob, an employee, leaves Company A on December 31, 2012. Amend tax return 2011 The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. Amend tax return 2011 Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. Amend tax return 2011   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. Amend tax return 2011 If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. Amend tax return 2011 If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Amend tax return 2011 Example. Amend tax return 2011 Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. Amend tax return 2011 The plan year runs from July 1 to June 30. Amend tax return 2011 Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Amend tax return 2011 Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. Amend tax return 2011 As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. Amend tax return 2011 In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. Amend tax return 2011 On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. Amend tax return 2011 That contribution was made on February 15, 2014. Amend tax return 2011 Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. Amend tax return 2011 No vested interest. Amend tax return 2011   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. Amend tax return 2011 Defined benefit plan. Amend tax return 2011   If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. Amend tax return 2011 This rule applies even if you: Declined to participate in the plan, Did not make a required contribution, or Did not perform the minimum service required to accrue a benefit for the year. Amend tax return 2011   A defined benefit plan is any plan that is not a defined contribution plan. Amend tax return 2011 In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. Amend tax return 2011 The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. Amend tax return 2011 Defined benefit plans include pension plans and annuity plans. Amend tax return 2011 Example. Amend tax return 2011 Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. Amend tax return 2011 Nick leaves Company B on December 31, 2012. Amend tax return 2011 Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. Amend tax return 2011 No vested interest. Amend tax return 2011   If you accrue a benefit for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the accrual. Amend tax return 2011 Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Amend tax return 2011 Social security or railroad retirement. Amend tax return 2011   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Amend tax return 2011 Benefits from previous employer's plan. Amend tax return 2011   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Amend tax return 2011 Reservists. Amend tax return 2011   If the only reason you participate in a plan is because you are a member of a reserve unit of the Armed Forces, you may not be covered by the plan. Amend tax return 2011 You are not covered by the plan if both of the following conditions are met. Amend tax return 2011 The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Amend tax return 2011 You did not serve more than 90 days on active duty during the year (not counting duty for training). Amend tax return 2011 Volunteer firefighters. Amend tax return 2011   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Amend tax return 2011 You are not covered by the plan if both of the following conditions are met. Amend tax return 2011 The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Amend tax return 2011 Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Amend tax return 2011 Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. Amend tax return 2011 Your deduction is also affected by how much income you had and by your filing status. Amend tax return 2011 Your deduction may also be affected by social security benefits you received. Amend tax return 2011 Reduced or no deduction. Amend tax return 2011   If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Amend tax return 2011   Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. Amend tax return 2011 These amounts vary depending on your filing status. Amend tax return 2011   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . Amend tax return 2011 Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. Amend tax return 2011 Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. Amend tax return 2011 You received social security benefits. Amend tax return 2011 You received taxable compensation. Amend tax return 2011 Contributions were made to your traditional IRA. Amend tax return 2011 You or your spouse was covered by an employer retirement plan. Amend tax return 2011 Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Amend tax return 2011 Appendix B includes an example with filled-in worksheets to assist you. Amend tax return 2011 Table 1-2. Amend tax return 2011 Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Amend tax return 2011 IF your filing status is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your modified adjusted gross income (modified AGI) is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 THEN you can take . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 single or head of household $59,000 or less a full deduction. Amend tax return 2011 more than $59,000 but less than $69,000 a partial deduction. Amend tax return 2011 $69,000 or more no deduction. Amend tax return 2011 married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. Amend tax return 2011 more than $95,000 but less than $115,000 a partial deduction. Amend tax return 2011 $115,000 or more no deduction. Amend tax return 2011 married filing separately2 less than $10,000 a partial deduction. Amend tax return 2011 $10,000 or more no deduction. Amend tax return 2011 1 Modified AGI (adjusted gross income). Amend tax return 2011 See Modified adjusted gross income (AGI) , later. Amend tax return 2011  2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status). Amend tax return 2011 Table 1-3. Amend tax return 2011 Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Amend tax return 2011 IF your filing status is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your modified adjusted gross income (modified AGI) is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 THEN you can take . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 single, head of household, or qualifying widow(er) any amount a full deduction. Amend tax return 2011 married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. Amend tax return 2011 married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. Amend tax return 2011 more than $178,000 but less than $188,000 a partial deduction. Amend tax return 2011 $188,000 or more no deduction. Amend tax return 2011 married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. Amend tax return 2011 $10,000 or more no deduction. Amend tax return 2011 1 Modified AGI (adjusted gross income). Amend tax return 2011 See Modified adjusted gross income (AGI) , later. Amend tax return 2011  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. Amend tax return 2011 For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Amend tax return 2011 If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. Amend tax return 2011 Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. Amend tax return 2011 Covered by a retirement plan. Amend tax return 2011   If you are covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI, as shown in Table 1-2. Amend tax return 2011 For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. Amend tax return 2011 If your spouse is covered. Amend tax return 2011   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 1-3. Amend tax return 2011 Filing status. Amend tax return 2011   Your filing status depends primarily on your marital status. Amend tax return 2011 For this purpose, you need to know if your filing status is single or head of household, married filing jointly or qualifying widow(er), or married filing separately. Amend tax return 2011 If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Amend tax return 2011 Lived apart from spouse. Amend tax return 2011   If you did not live with your spouse at any time during the year and you file a separate return, your filing status, for this purpose, is single. Amend tax return 2011 Modified adjusted gross income (AGI). Amend tax return 2011   You can use Worksheet 1-1 to figure your modified AGI. Amend tax return 2011 If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. Amend tax return 2011    Do not assume that your modified AGI is the same as your compensation. Amend tax return 2011 Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. Amend tax return 2011 Form 1040. Amend tax return 2011   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Amend tax return 2011 IRA deduction. Amend tax return 2011 Student loan interest deduction. Amend tax return 2011 Tuition and fees deduction. Amend tax return 2011 Domestic production activities deduction. Amend tax return 2011 Foreign earned income exclusion. Amend tax return 2011 Foreign housing exclusion or deduction. Amend tax return 2011 Exclusion of qualified savings bond interest shown on Form 8815. Amend tax return 2011 Exclusion of employer-provided adoption benefits shown on Form 8839. Amend tax return 2011 This is your modified AGI. Amend tax return 2011 Form 1040A. Amend tax return 2011   If you file Form 1040A, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Amend tax return 2011 IRA deduction. Amend tax return 2011 Student loan interest deduction. Amend tax return 2011 Tuition and fees deduction. Amend tax return 2011 Exclusion of qualified savings bond interest shown on Form 8815. Amend tax return 2011 This is your modified AGI. Amend tax return 2011 Form 1040NR. Amend tax return 2011   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Amend tax return 2011 IRA deduction. Amend tax return 2011 Student loan interest deduction. Amend tax return 2011 Domestic production activities deduction. Amend tax return 2011 Exclusion of qualified savings bond interest shown on Form 8815. Amend tax return 2011 Exclusion of employer-provided adoption benefits shown on Form 8839. Amend tax return 2011 This is your modified AGI. Amend tax return 2011 Income from IRA distributions. Amend tax return 2011   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. Amend tax return 2011 Both contributions for 2013 and distributions in 2013. Amend tax return 2011   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Amend tax return 2011 You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. Amend tax return 2011 (See Nondeductible Contributions and Worksheet 1-2, later. Amend tax return 2011 ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Amend tax return 2011 To do this, you can use Worksheet 1-5, later. Amend tax return 2011   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. Amend tax return 2011 How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. Amend tax return 2011 Figuring Your Reduced IRA Deduction for 2013. Amend tax return 2011 The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. Amend tax return 2011 If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. Amend tax return 2011 Note. Amend tax return 2011 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Amend tax return 2011 Worksheet 1-1. Amend tax return 2011 Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. Amend tax return 2011 1. Amend tax return 2011 Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. Amend tax return 2011   2. Amend tax return 2011 Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. Amend tax return 2011   3. Amend tax return 2011 Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Amend tax return 2011   4. Amend tax return 2011 Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. Amend tax return 2011   5. Amend tax return 2011 Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Amend tax return 2011   6. Amend tax return 2011 Enter any foreign housing deduction from Form 2555, line 50 6. Amend tax return 2011   7. Amend tax return 2011 Enter any excludable savings bond interest from Form 8815, line 14 7. Amend tax return 2011   8. Amend tax return 2011 Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Amend tax return 2011   9. Amend tax return 2011 Add lines 1 through 8. Amend tax return 2011 This is your Modified AGI for traditional IRA purposes 9. Amend tax return 2011   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Amend tax return 2011 If you file Form 1040A, enter your IRA deduction on line 17 of that form. Amend tax return 2011 If you file Form 1040NR, enter your IRA deduction on line 32 of that form. Amend tax return 2011 You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. Amend tax return 2011 Self-employed. Amend tax return 2011   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. Amend tax return 2011 If you file Form 1040NR, enter your deduction on line 28 of that form. Amend tax return 2011 Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Amend tax return 2011 The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Amend tax return 2011 Example. Amend tax return 2011 Tony is 29 years old and single. Amend tax return 2011 In 2013, he was covered by a retirement plan at work. Amend tax return 2011 His salary is $62,000. Amend tax return 2011 His modified AGI is $70,000. Amend tax return 2011 Tony makes a $5,500 IRA contribution for 2013. Amend tax return 2011 Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. Amend tax return 2011 He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. Amend tax return 2011 Repayment of reservist distributions. Amend tax return 2011   Nondeductible contributions may include repayments of qualified reservist distributions. Amend tax return 2011 For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. Amend tax return 2011 Form 8606. Amend tax return 2011   To designate contributions as nondeductible, you must file Form 8606. Amend tax return 2011 (See the filled-in Forms 8606 in this chapter. Amend tax return 2011 )   You do not have to designate a contribution as nondeductible until you file your tax return. Amend tax return 2011 When you file, you can even designate otherwise deductible contributions as nondeductible contributions. Amend tax return 2011   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Amend tax return 2011    A Form 8606 is not used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. Amend tax return 2011 In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Amend tax return 2011 See Form 8606 under Distributions Fully or Partly Taxable, later. Amend tax return 2011 Failure to report nondeductible contributions. Amend tax return 2011   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. Amend tax return 2011 All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Amend tax return 2011 Penalty for overstatement. Amend tax return 2011   If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. Amend tax return 2011 Penalty for failure to file Form 8606. Amend tax return 2011   You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause. Amend tax return 2011 Tax on earnings on nondeductible contributions. Amend tax return 2011   As long as contributions are within the contribution limits, none of the earnings or gains on contributions (deductible or nondeductible) will be taxed until they are distributed. Amend tax return 2011 Cost basis. Amend tax return 2011   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Amend tax return 2011 Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Amend tax return 2011    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. Amend tax return 2011 See Are Distributions Taxable, later, for more information. Amend tax return 2011 Recordkeeping. Amend tax return 2011 There is a recordkeeping worksheet, Appendix A. Amend tax return 2011 Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. Amend tax return 2011 Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. Amend tax return 2011 Example 1. Amend tax return 2011 For 2013, Tom and Betty file a joint return on Form 1040. Amend tax return 2011 They are both 39 years old. Amend tax return 2011 They are both employed and Tom is covered by his employer's retirement plan. Amend tax return 2011 Tom's salary is $59,000 and Betty's is $32,555. Amend tax return 2011 They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. Amend tax return 2011 Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Amend tax return 2011 For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. Amend tax return 2011 Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. Amend tax return 2011 Tom can take a deduction of only $5,080. Amend tax return 2011 He can choose to treat the $5,080 as either deductible or nondeductible contributions. Amend tax return 2011 He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Amend tax return 2011 He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. Amend tax return 2011 Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. Amend tax return 2011 Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. Amend tax return 2011 Betty figures her IRA deduction as follows. Amend tax return 2011 Betty can treat all or part of her contributions as either deductible or nondeductible. Amend tax return 2011 This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Amend tax return 2011 She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. Amend tax return 2011 Betty decides to treat her $5,500 IRA contributions as deductible. Amend tax return 2011 The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. Amend tax return 2011 Example 2. Amend tax return 2011 For 2013, Ed and Sue file a joint return on Form 1040. Amend tax return 2011 They are both 39 years old. Amend tax return 2011 Ed is covered by his employer's retirement plan. Amend tax return 2011 Ed's salary is $45,000. Amend tax return 2011 Sue had no compensation for the year and did not contribute to an IRA. Amend tax return 2011 Sue is not covered by an employer plan. Amend tax return 2011 Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). Amend tax return 2011 Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. Amend tax return 2011 Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. Amend tax return 2011 He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Amend tax return 2011 Sue figures her IRA deduction as shown on Worksheet 1-2. Amend tax return 2011 Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. Amend tax return 2011 Worksheet 1-2. Amend tax return 2011 Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Amend tax return 2011 ) Note. Amend tax return 2011 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Amend tax return 2011 IF you . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your  filing status is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your modified AGI is over . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 THEN enter on  line 1 below . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Amend tax return 2011 Enter applicable amount from table above 1. Amend tax return 2011   2. Amend tax return 2011 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Amend tax return 2011     Note. Amend tax return 2011 If line 2 is equal to or more than the amount on line 1, stop here. Amend tax return 2011  Your IRA contributions are not deductible. Amend tax return 2011 See Nondeductible Contributions , earlier. Amend tax return 2011     3. Amend tax return 2011 Subtract line 2 from line 1. Amend tax return 2011 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Amend tax return 2011 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Amend tax return 2011   4. Amend tax return 2011 Multiply line 3 by the percentage below that applies to you. Amend tax return 2011 If the result is not a multiple of $10, round it to the next highest multiple of $10. Amend tax return 2011 (For example, $611. Amend tax return 2011 40 is rounded to $620. Amend tax return 2011 ) However, if the result is less than $200, enter $200. Amend tax return 2011         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Amend tax return 2011 5% (. Amend tax return 2011 275) (by 32. Amend tax return 2011 5% (. Amend tax return 2011 325) if you are age 50 or older). Amend tax return 2011 All others, multiply line 3 by 55% (. Amend tax return 2011 55) (by 65% (. Amend tax return 2011 65) if you are age 50 or older). Amend tax return 2011 4. Amend tax return 2011   5. Amend tax return 2011 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Amend tax return 2011 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Amend tax return 2011 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Amend tax return 2011   6. Amend tax return 2011 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Amend tax return 2011 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Amend tax return 2011 6. Amend tax return 2011   7. Amend tax return 2011 IRA deduction. Amend tax return 2011 Compare lines 4, 5, and 6. Amend tax return 2011 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Amend tax return 2011 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Amend tax return 2011   8. Amend tax return 2011 Nondeductible contribution. Amend tax return 2011 Subtract line 7 from line 5 or 6, whichever is smaller. Amend tax return 2011  Enter the result here and on line 1 of your Form 8606 8. Amend tax return 2011   Worksheet 1-2. Amend tax return 2011 Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Amend tax return 2011 ) Note. Amend tax return 2011 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Amend tax return 2011 IF you . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your  filing status is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your modified AGI is over . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 THEN enter on  line 1 below . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Amend tax return 2011 Enter applicable amount from table above 1. Amend tax return 2011 115,000 2. Amend tax return 2011 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Amend tax return 2011 96,555   Note. Amend tax return 2011 If line 2 is equal to or more than the amount on line 1, stop here. Amend tax return 2011  Your IRA contributions are not deductible. Amend tax return 2011 See Nondeductible Contributions , earlier. Amend tax return 2011     3. Amend tax return 2011 Subtract line 2 from line 1. Amend tax return 2011 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Amend tax return 2011 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Amend tax return 2011 18,445 4. Amend tax return 2011 Multiply line 3 by the percentage below that applies to you. Amend tax return 2011 If the result is not a multiple of $10, round it to the next highest multiple of $10. Amend tax return 2011 (For example, $611. Amend tax return 2011 40 is rounded to $620. Amend tax return 2011 ) However, if the result is less than $200, enter $200. Amend tax return 2011         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Amend tax return 2011 5% (. Amend tax return 2011 275) (by 32. Amend tax return 2011 5% (. Amend tax return 2011 325) if you are age 50 or older). Amend tax return 2011 All others, multiply line 3 by 55% (. Amend tax return 2011 55) (by 65% (. Amend tax return 2011 65) if you are age 50 or older). Amend tax return 2011 4. Amend tax return 2011 5,080 5. Amend tax return 2011 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Amend tax return 2011 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Amend tax return 2011 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Amend tax return 2011 59,000 6. Amend tax return 2011 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Amend tax return 2011 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Amend tax return 2011 6. Amend tax return 2011 5,500 7. Amend tax return 2011 IRA deduction. Amend tax return 2011 Compare lines 4, 5, and 6. Amend tax return 2011 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Amend tax return 2011 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Amend tax return 2011 5,080 8. Amend tax return 2011 Nondeductible contribution. Amend tax return 2011 Subtract line 7 from line 5 or 6, whichever is smaller. Amend tax return 2011  Enter the result here and on line 1 of your Form 8606 8. Amend tax return 2011 420 Worksheet 1-2. Amend tax return 2011 Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Amend tax return 2011 ) Note. Amend tax return 2011 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Amend tax return 2011 IF you . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your  filing status is . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 AND your modified AGI is over . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011 THEN enter on  line 1 below . Amend tax return 2011 . Amend tax return 2011 . Amend tax return 2011       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Amend tax return 2011 Enter applicable amount from table above 1. Amend tax return 2011 188,000 2. Amend tax return 2011 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Amend tax return 2011 180,555   Note. Amend tax return 2011 If line 2 is equal to or more than the amount on line 1, stop here. Amend tax return 2011  Your IRA contributions are not deductible. Amend tax return 2011 See Nondeductible Contributions , earlier. Amend tax return 2011     3. Amend tax return 2011 Subtract line 2 from line 1. Amend tax return 2011 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Amend tax return 2011 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Amend tax return 2011 7,445 4. Amend tax return 2011 Multiply line 3 by the percentage below that applies to you. Amend tax return 2011 If the result is not a multiple of $10, round it to the next highest multiple of $10. Amend tax return 2011 (For example, $611. Amend tax return 2011 40 is rounded to $620. Amend tax return 2011 ) However, if the result is less than $200, enter $200. Amend tax return 2011         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Amend tax return 2011 5% (. Amend tax return 2011 275) (by 32. Amend tax return 2011 5% (. Amend tax return 2011 325) if you are age 50 or older). Amend tax return 2011 All others, multiply line 3 by 55% (. Amend tax return 2011 55) (by 65% (. Amend tax return 2011 65) if you are age 50 or older). Amend tax return 2011 4. Amend tax return 2011 4,100 5. Amend tax return 2011 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Amend tax return 2011 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Amend tax return 2011 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Amend tax return 2011 39,500 6. Amend tax return 2011 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Amend tax return 2011 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Amend tax return 2011 6. Amend tax return 2011 5,500 7. Amend tax return 2011 IRA deduction. Amend tax return 2011 Compare lines 4, 5, and 6. Amend tax return 2011 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Amend tax return 2011 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Amend tax return 2011 4,100 8. Amend tax return 2011 Nondeductible contribution. Amend tax return 2011 Subtract line 7 from line 5 or 6, whichever is smaller. Amend tax return 2011  Enter the result here and on line 1 of your Form 8606 8. Amend tax return 2011 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. Amend tax return 2011 A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Amend tax return 2011 Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Amend tax return 2011 Inherited from spouse. Amend tax return 2011   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Amend tax return 2011 You can: Treat it as your own IRA by designating yourself as the account owner. Amend tax return 2011 Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (s
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Understanding Your CP30 Notice

We charged you a penalty for not pre-paying enough of your tax either by having taxes withheld from your income, or by making timely estimated tax payments.


What you need to do

  • Review the amounts being withheld from your wages, pensions and annuities, and other sources of income. If the amount withheld is not sufficient, adjust it by filing new withholding certificates (Form W-4, W-4P, W-4S, or W-4V) with your employer(s) or other payer(s).
  • Make timely estimated tax payments, if necessary, to ensure that you pre-pay a sufficient amount of tax through a combination of withholding and estimated tax payments. See Who Must Pay the Underpayment Penalty in the Form 2210 instructions for the amounts required to be paid.

You may want to...

  • Complete Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, if most of the tax withheld from your income was withheld early in the year. Electing to report withholding when it was actually withheld, instead of spreading it equally through the year, may reduce or eliminate the penalty.
  • Complete Form 2210, Schedule AI, Annualized Income Installment Method, if you did not receive your income evenly through the year, and you received more than half of your income during the third and fourth quarters of the year. Annualizing your income may reduce or eliminate the penalty we charged.
  • Request removal of the penalty if you retired in the past two years either because you were 62 or older, or because you became disabled, and you had reasonable cause for the underpayment, or for the late payment of your estimated tax. (See Waiver of Penalty in Form 2210 instructions.)
  • Request removal of the penalty if the underpayment, or the late payment of your estimated tax, was due to a casualty, disaster, or other unusual circumstance that makes assessment of the penalty unfair. (See Waiver of Penalty in Form 2210 instructions.)
  • Request removal of the penalty if the underpayment, or the late payment of your estimated tax, was due to specific written advice from an IRS agent given in response to a specific written request. You must provide copies of both the written request, and the written advice given in response.

Answers to Common Questions

How do I know if enough is being withheld from my income?
The IRS Withholding Calculator can help you determine if enough tax is being withheld. Publication 919, How Do I Adjust My Tax Withholding, is another good resource.

How much am I required to pre-pay in order to avoid a penalty?
You are generally required to pre-pay at least 90% of your tax either by having the tax withheld from your income, or by making timely estimated tax payments. A penalty will also not be charged if you pre-pay a "safe harbor" amount equal to 100% of the previous year's tax. However, special rules exist for certain taxpayers:

  • Qualifying farmers and fishermen are required to pre-pay only 2/3 (66.67%) of their tax, or the safe harbor amount, whichever is less. You are a qualifying farmer/fisherman if at least 2/3 of your gross income in either the current or previous year is or was derived from farming or fishing. See Farmers and Fishermen in Publication 505 for more information.
  • The safe harbor amount for high income taxpayers is 110% of the previous year's tax. You are a high income taxpayer if your previous year's adjusted gross income was $150,000 or more ($75,000 or more if you were married, filing a separate return).

You also will not be charged a penalty if your total tax due, after withholding, is less than $1,000, or if you had no tax liability for the previous year.

If I have to make estimated tax payments, when are they due?
Estimated tax payments are generally due on April 15, June 15, and September 15 of the tax year, and on January 15 of the next year.

For filers with a taxable year that ends in a month other than December, the payments are due on the 15th day of the 4th, 6th, and 9th month of the taxable year, and on the 15th day of the first month of the following taxable year.

Page Last Reviewed or Updated: 03-Mar-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Amend Tax Return 2011

Amend tax return 2011 Index A Accelerated Cost Recovery System (ACRS), MACRS Depreciation (see also Modified Accelerated Cost Recovery System (MACRS)) Effective date, Depreciation Methods Accounting methods Accrual method, Accrual method. Amend tax return 2011 Cash method, Cash method. Amend tax return 2011 Change of method, Changing your accounting method. Amend tax return 2011 Constructive receipt of income, Cash method. Amend tax return 2011 , More information. Amend tax return 2011 Accrual method taxpayers, Accrual method. Amend tax return 2011 ACRS (Accelerated Cost Recovery System) Effective date, Depreciation Methods Active participation, Active participation. Amend tax return 2011 Activities not for profit, Duplex. Amend tax return 2011 Additions to property, Additions or improvements to property. Amend tax return 2011 (see also Improvements) Basis, Increases to basis. Amend tax return 2011 , Additions or improvements. Amend tax return 2011 MACRS recovery period, Additions or improvements to property. Amend tax return 2011 Adjusted basis MACRS depreciation, Adjusted Basis Adjusted gross income (AGI) Modified (see Modified adjusted gross income (MAGI)) Advance rent, Advance rent. Amend tax return 2011 Security deposits, Security deposits. Amend tax return 2011 Advertising, Types of Expenses Allocation of expenses Change of property to rental use, Payments added to capital account. Amend tax return 2011 How to divide expenses, Dividing Expenses Part of property rented, Renting Part of Property, How to divide expenses. Amend tax return 2011 Personal use of rental property, Personal use of rental property. Amend tax return 2011 , Personal Use of Dwelling Unit (Including Vacation Home) Alternative Depreciation System (ADS) Election of, Electing ADS MACRS, MACRS Depreciation, Table 2-2d. Amend tax return 2011 Alternative minimum tax (AMT) Accelerated depreciation methods, Alternative minimum tax (AMT). Amend tax return 2011 Amended returns, Filing an amended return. Amend tax return 2011 Apartments Basement apartments, Examples. Amend tax return 2011 Dwelling units, Dwelling unit. Amend tax return 2011 Appraisal fees, Settlement fees and other costs. Amend tax return 2011 Assessments for maintenance, Assessments for local improvements. Amend tax return 2011 Assessments, local (see Local assessments) Assistance (see Tax help) Assumption of mortgage, Assumption of a mortgage. Amend tax return 2011 Attorneys' fees, Settlement fees and other costs. Amend tax return 2011 , Increases to basis. Amend tax return 2011 Automobiles MACRS recovery periods, Property Classes Under GDS B Basis Adjusted basis, Adjusted Basis Assessments for local improvements, Assessments for local improvements. Amend tax return 2011 Basis other than cost, Basis Other Than Cost Cost basis, Cost Basis Decreases to, Decreases to basis. Amend tax return 2011 Deductions Capitalization of costs vs. Amend tax return 2011 , Deducting vs. Amend tax return 2011 capitalizing costs. Amend tax return 2011 Not greater than basis, Cost or Other Basis Fully Recovered Fair market value, Fair market value. Amend tax return 2011 Increases to, Increases to basis. Amend tax return 2011 MACRS depreciable basis, Basis of Depreciable Property Property changed to rental use, Basis of Property Changed to Rental Use C Capital expenditures Deductions vs. Amend tax return 2011 effect on basis, Deducting vs. Amend tax return 2011 capitalizing costs. Amend tax return 2011 Local benefit taxes, Local benefit taxes. Amend tax return 2011 Mortgages, payments to obtain, Expenses paid to obtain a mortgage. Amend tax return 2011 Cars MACRS recovery periods, Property Classes Under GDS Cash method taxpayers, Cash method. Amend tax return 2011 Casualty losses, Exception for Rental Real Estate With Active Participation Change of accounting method, Changing your accounting method. Amend tax return 2011 Charitable contributions Use of property, Donation of use of the property. Amend tax return 2011 Cleaning and maintenance, Types of Expenses Closing costs, Settlement fees and other costs. Amend tax return 2011 Commissions, Types of Expenses Computers MACRS recovery periods, Property Classes Under GDS Condominiums, Condominiums, Dwelling unit. Amend tax return 2011 Constructive receipt of income, Cash method. Amend tax return 2011 , More information. Amend tax return 2011 Cooperative housing, Cooperative apartments. Amend tax return 2011 , Cooperatives, Dwelling unit. Amend tax return 2011 Cost basis, Cost Basis Credit reports, Settlement fees and other costs. Amend tax return 2011 Credits Residential energy credits, Decreases to basis. Amend tax return 2011 D Days of personal use, What is a day of personal use? Days used for repairs and maintenance, Days used for repairs and maintenance. Amend tax return 2011 Deductions Capitalizing costs vs. Amend tax return 2011 effect on basis, Deducting vs. Amend tax return 2011 capitalizing costs. Amend tax return 2011 Depreciation (see Depreciation) Limitations on, Form 4562. Amend tax return 2011 Passive activity losses (see Passive activity) Depreciation, Depreciation of Rental Property, Changing your accounting method. Amend tax return 2011 Alternative Depreciation System (ADS) (see Modified Accelerated Cost Recovery System (MACRS)) Basis (see Basis) Change of accounting method, Changing your accounting method. Amend tax return 2011 Change of property to rental use, Property Changed to Rental Use Claiming correct amount of, Claiming the Correct Amount of Depreciation Declining balance method, Depreciation Methods Duration of property expected to last more than one year, What Rental Property Can Be Depreciated? Eligible property, What Rental Property Can Be Depreciated? First-year expensing, Section 179 deduction. Amend tax return 2011 MACRS (see Modified Accelerated Cost Recovery System (MACRS)) Methods, Depreciation Methods, Figuring Your Depreciation Deduction Ownership of property, What Rental Property Can Be Depreciated?, Property you own. Amend tax return 2011 Rental expense, Depreciation. Amend tax return 2011 Rented property, Rented property. Amend tax return 2011 Section 179 deduction, Section 179 deduction. Amend tax return 2011 Special depreciation allowances, Claiming the Special Depreciation Allowance Straight line method, Depreciation Methods Useful life, What Rental Property Can Be Depreciated?, Property having a determinable useful life. Amend tax return 2011 Vacant rental property, Vacant rental property. Amend tax return 2011 Discount, bonds and notes issued at (see Original issue discount (OID)) Dividing of expenses (see Allocation of expenses) Dwelling units Definition, Dwelling unit. Amend tax return 2011 Fair rental price, Fair rental price. Amend tax return 2011 Personal use of, Personal Use of Dwelling Unit (Including Vacation Home), What is a day of personal use? E Easements, Decreases to basis. Amend tax return 2011 Equipment rental expense, Rental of equipment. Amend tax return 2011 F Fair market value (FMV), Fair market value. Amend tax return 2011 Fair rental price, Dividing Expenses, Fair rental price. Amend tax return 2011 Fees Loan origination fees, Points, Settlement fees and other costs. Amend tax return 2011 Points (see Points) Settlement fees and other costs, Settlement fees and other costs. Amend tax return 2011 Tax return preparation fees, Legal and other professional fees. Amend tax return 2011 First-year expensing, Section 179 deduction. Amend tax return 2011 Form 1040 Not rented for profit income, Where to report. Amend tax return 2011 Part of property rented, Renting Part of Property Rental income and expenses, Reporting Rental Income, Expenses, and Losses Schedule E, Schedule E (Form 1040) Form 1098 Mortgage interest, Form 1098, Mortgage Interest Statement. Amend tax return 2011 Form 4684 Casualties and thefts, How to report. Amend tax return 2011 Form 4797 Sales of business property, How to report. Amend tax return 2011 Form 8582 Passive activity losses, Form 8582. Amend tax return 2011 , Form 8582 not required. Amend tax return 2011 Free tax services, Free help with your tax return. Amend tax return 2011 G Gains and losses At-risk rules, At-Risk Rules Casualty and theft losses, Exception for Rental Real Estate With Active Participation Limits on rental losses, Form 4562. Amend tax return 2011 Passive activity losses, Passive Activity Limits Rental real estate activities, Exception for Rental Real Estate With Active Participation Sale of rental property, Sale or exchange of rental property. Amend tax return 2011 , How to report. Amend tax return 2011 General depreciation system (GDS) (see Modified Accelerated Cost Recovery System (MACRS)) H Help (see Tax help) Home Main home, Main home. Amend tax return 2011 Use as rental property (see Use of home) I Improvements, Table 1-1. Amend tax return 2011 Examples of Improvements (see also Repairs) Assessments for local improvements, Assessments for local improvements. Amend tax return 2011 Basis, Increases to basis. Amend tax return 2011 , Additions or improvements. Amend tax return 2011 Depreciation of rented property, Rented property. Amend tax return 2011 MACRS recovery period, Additions or improvements to property. Amend tax return 2011 Insurance, Types of Expenses Casualty or theft loss payments, Decreases to basis. Amend tax return 2011 Change of property to rental use, Property Changed to Rental Use Fire insurance premiums, cost basis, Settlement fees and other costs. Amend tax return 2011 Part of property rented, Renting Part of Property Premiums paid in advance, Insurance premiums paid in advance. Amend tax return 2011 Title insurance, cost basis, Settlement fees and other costs. Amend tax return 2011 Interest payments, Interest expense. Amend tax return 2011 (see also Mortgages) Loan origination fees, Points Rental expenses, Types of Expenses L Land Cost basis, Separating cost of land and buildings. Amend tax return 2011 Depreciation, Land. Amend tax return 2011 Leases Cancellation payments, Canceling a lease. Amend tax return 2011 Equipment leasing, Rental of equipment. Amend tax return 2011 Limits Passive activity losses and credits, Passive Activity Limits Rental losses, Limits on Rental Losses Loans Assumption fees, Settlement fees and other costs. Amend tax return 2011 Charges connected with getting or refinancing, cost basis, Settlement fees and other costs. Amend tax return 2011 Low or no interest, Loans with low or no interest. Amend tax return 2011 Origination fees, Points Local assessments, Assessments for local improvements. Amend tax return 2011 Losses (see Gains and losses) M Missing children, photographs of, Reminders Modified Accelerated Cost Recovery System (MACRS), MACRS Depreciation, Figuring MACRS Depreciation Under ADS Additions or improvements to property, Additions or improvements to property. Amend tax return 2011 Adjusted basis, Adjusted Basis Alternative Depreciation System (ADS), MACRS Depreciation, Figuring MACRS Depreciation Under ADS Basis other than cost, Basis Other Than Cost Conventions, Conventions Cost basis, Cost Basis Depreciable basis, Basis of Depreciable Property Effective date, Depreciation Methods Excluded property, Excluded Property General Depreciation System (GDS), MACRS Depreciation, Property Classes Under GDS, Figuring Your Depreciation Deduction Nonresidential rental property, Property Classes Under GDS Property used in rental activities (Table 2-1), Table 2-1. Amend tax return 2011 MACRS Recovery Periods for Property Used in Rental Activities Recovery periods, Table 2-1. Amend tax return 2011 MACRS Recovery Periods for Property Used in Rental Activities, 5-, 7-, or 15-year property. Amend tax return 2011 Residential rental property, Property Classes Under GDS, Residential rental property. Amend tax return 2011 Special depreciation allowances, Claiming the Special Depreciation Allowance Modified adjusted gross income (MAGI), Modified adjusted gross income (MAGI). Amend tax return 2011 Mortgages, Expenses paid to obtain a mortgage. Amend tax return 2011 Assumption of, cost basis, Assumption of a mortgage. Amend tax return 2011 Change of property to rental use, Property Changed to Rental Use End of, OID, Loan or mortgage ends. Amend tax return 2011 Interest, Interest expense. Amend tax return 2011 , Property Changed to Rental Use, Renting Part of Property Mortgage insurance premiums, Settlement fees and other costs. Amend tax return 2011 Part of property rented, Renting Part of Property N Nonresidential real property, Property Classes Under GDS Not-for-profit activities, Duplex. Amend tax return 2011 O Original issue discount (OID), Points, Loan or mortgage ends. Amend tax return 2011 P Part interest Expenses, Part interest. Amend tax return 2011 Income, Part interest. Amend tax return 2011 Passive activity Maximum special allowance, Maximum special allowance. Amend tax return 2011 Personal property Rental income from, Property or services. Amend tax return 2011 Personal use of rental property, Payments added to capital account. Amend tax return 2011 , Personal Use of Dwelling Unit (Including Vacation Home) (see also Property changed to rental use) Placed-in-service date, Placed in Service Points, Types of Expenses, Points, Settlement fees and other costs. Amend tax return 2011 Pre-rental expenses, Pre-rental expenses. Amend tax return 2011 Principal residence (see Home) Profit, property not rented for, Duplex. Amend tax return 2011 Property changed to rental use, Payments added to capital account. Amend tax return 2011 Basis, Basis of Property Changed to Rental Use Publications (see Tax help) R Real estate professionals, Real estate professionals. Amend tax return 2011 Real estate taxes, Real estate taxes. Amend tax return 2011 Real property trades or businesses, Real property trades or businesses. Amend tax return 2011 Recordkeeping requirements Travel and transportation expenses, Local transportation expenses. Amend tax return 2011 , Travel expenses. Amend tax return 2011 Recovery periods, Property Classes Under GDS Rent, Settlement fees and other costs. Amend tax return 2011 Advance rent, Advance rent. Amend tax return 2011 Fair price, Fair rental price. Amend tax return 2011 Rental expenses, Rental Expenses Advertising, Types of Expenses Allocation between rental and personal uses, Dividing Expenses Change of property to rental use, Property Changed to Rental Use Cleaning and maintenance, Types of Expenses Commissions, Types of Expenses Depreciation, Depreciation. Amend tax return 2011 Dwelling unit used as home, Dwelling Unit Used as a Home Equipment rental, Rental of equipment. Amend tax return 2011 Home, property also used as, Rental of property also used as your home. Amend tax return 2011 Improvements, Table 1-1. Amend tax return 2011 Examples of Improvements Insurance, Types of Expenses, Insurance premiums paid in advance. Amend tax return 2011 Interest payments, Types of Expenses, Interest expense. Amend tax return 2011 Local transportation expenses, Types of Expenses, Local transportation expenses. Amend tax return 2011 Part of property rented, Renting Part of Property Points, Types of Expenses, Points Pre-rental expenses, Pre-rental expenses. Amend tax return 2011 Rental payments, Types of Expenses Repairs, Types of Expenses, Repairs and Improvements Sale of property, Vacant while listed for sale. Amend tax return 2011 Tax return preparation fees, Legal and other professional fees. Amend tax return 2011 Taxes, Types of Expenses Tenant, paid by, Expenses paid by tenant. Amend tax return 2011 Travel expenses, Types of Expenses Utilities, Types of Expenses Vacant rental property, Vacant rental property. Amend tax return 2011 Rental income Advance rent, Advance rent. Amend tax return 2011 Cancellation of lease payments, Canceling a lease. Amend tax return 2011 Dwelling unit used as home, Dwelling Unit Used as a Home Lease with option to buy, Lease with option to buy. Amend tax return 2011 Not rented for profit, Not Rented for Profit Part interest, Part interest. Amend tax return 2011 Property received from tenant, Property or services. Amend tax return 2011 Reporting, Accrual method. Amend tax return 2011 , Which Forms To Use Security deposit, Security deposits. Amend tax return 2011 Services received from tenant, Property or services. Amend tax return 2011 Uncollected rent, Uncollected rent. Amend tax return 2011 Used as home, Rental of property also used as your home. Amend tax return 2011 Rental losses, Exception for Rental Real Estate With Active Participation (see also Gains and losses) (see also Passive activity) Repairs, Types of Expenses, Repairs and Improvements (see also Improvements) Assessments for maintenance, Assessments for local improvements. Amend tax return 2011 Personal use of rental property exception for days used for repairs and maintenance, Days used for repairs and maintenance. Amend tax return 2011 S Sale of property Expenses, Vacant while listed for sale. Amend tax return 2011 Gain or loss, Sale or exchange of rental property. Amend tax return 2011 , How to report. Amend tax return 2011 Main home, Sale of main home used as rental property. Amend tax return 2011 Section 179 deductions, Section 179 deduction. Amend tax return 2011 Security deposits, Security deposits. Amend tax return 2011 Settlement fees, Settlement fees and other costs. Amend tax return 2011 Shared equity financing agreements, Shared equity financing agreement. Amend tax return 2011 Special depreciation allowances, Claiming the Special Depreciation Allowance Spouse Material participation, Participating spouse. Amend tax return 2011 Standard mileage rates, Local transportation expenses. Amend tax return 2011 Surveys, Settlement fees and other costs. Amend tax return 2011 T Tables and figures Improvements, examples of (Table 1-1), Table 1-1. Amend tax return 2011 Examples of Improvements MACRS optional tables (Table 2-2d), Table 2-2d. Amend tax return 2011 MACRS optional tables (Tables 2-2a, 2-2b, and 2-2c), Tables 2-2a, 2-2b, and 2-2c. Amend tax return 2011 MACRS recovery periods for property used in rental activities (Table 2-1), Table 2-1. Amend tax return 2011 MACRS Recovery Periods for Property Used in Rental Activities Tax credits Residential energy credits, effect on basis, Decreases to basis. Amend tax return 2011 Tax help, How To Get Tax Help Tax return preparation fees, Legal and other professional fees. Amend tax return 2011 Taxes Deduction of, Types of Expenses Local benefit taxes, Local benefit taxes. Amend tax return 2011 Real estate taxes, Real estate taxes. Amend tax return 2011 Transfer taxes, Settlement fees and other costs. Amend tax return 2011 Theft losses, Theft. Amend tax return 2011 Title insurance, Settlement fees and other costs. Amend tax return 2011 Transfer taxes, Settlement fees and other costs. Amend tax return 2011 Travel and transportation expenses Local transportation expenses, Types of Expenses, Local transportation expenses. Amend tax return 2011 Recordkeeping, Travel expenses. Amend tax return 2011 Rental expenses, Types of Expenses Standard mileage rate, Local transportation expenses. Amend tax return 2011 U Uncollected rent Income, Uncollected rent. Amend tax return 2011 Use of home Before or after renting, Days used as a main home before or after renting. Amend tax return 2011 Change to rental use, Property Changed to Rental Use Days of personal use, What is a day of personal use? Fair rental price, Fair rental price. Amend tax return 2011 Passive activity rules exception, Exception for Personal Use of Dwelling Unit Personal use as dwelling unit, Personal Use of Dwelling Unit (Including Vacation Home) Utilities, Types of Expenses, Increases to basis. Amend tax return 2011 V Vacant rental property, Vacant rental property. Amend tax return 2011 Vacation homes Dwelling unit, Dwelling unit. Amend tax return 2011 Fair rental price, Fair rental price. Amend tax return 2011 Personal use of, Personal Use of Dwelling Unit (Including Vacation Home) Valuation Fair market value, Fair market value. Amend tax return 2011 Prev  Up     Home   More Online Publications